Putting the losses it sustained in a factory fire in May behind it, Advanced Semiconductor Engineering Inc (ASE,
Sales are expected to improve by 11 percent to 13 percent quarter-on-quarter, driven mainly by the fast-growing demand for consumer-electronics products, particularly game consoles and communication products, Advanced Semiconductor's chief financial officer Joseph Tung (董宏思) told investors yesterday.
A fire broke out on May 1 in the company's plant in Chungli (
Advanced Semiconductor, the world's No. 1 chip tester and packager, is expected to boost its gross margin to 15 percent in the July-to-September period, up from 11.4 percent in the previous quarter, due to flat depreciation costs after the fire, Tung said.
The fire also raised the firm's total capital expenses for this year to US$300 million, up from the US$250 billion projected earlier this year, he said.
The company yesterday reported a net loss of NT$9.09 billion (US$286.2 million), or a loss of NT$2.31 per share, on net sales of NT$18.82 billion in the second quarter, compared with a net loss of NT$128 million, or a loss of NT$0.03 per share, on net revenue of NT$18.57 billion.
The fire was the main reason behind the hefty second-quarter loss, with damage amounting to an estimated NT$8.7 billion, Tung said.
He added that this figure, which is based on the worst scenario, might be reduced by insurance compensation over the next nine to 12 months.
ASE was outperformed by its small local rival Siliconware Precision Industries Co (矽品), which last week reported second-quarter earnings of NT$1.29 billion, up marginally from NT$1.2 billion in the first quarter, on sales of NT$9.04 billion, up 13.3 percent quarter-on-quarter.
The fire caused ASE to lose orders to its competitors, accounting for around 5 percent of its revenue, and thus ate into its earnings on top of the heavy fire damage in the April-June quarter, Morgan Stanley's semiconductor analyst Frank Wang (王安亞) said.
"But the worst is behind now, and the company is expected to turn a profit in the current quarter" Wang said.
Looking ahead, ASE expects to fully restore its substrate shipments to 12 million units by next month or October, up from 6 million units at present, Tung said.
In principle, the chip packager plans to keep a tight capacity to safeguard the average selling price in the last half of this year to pursue higher returns, he added.
Pricing is likely to nudge up in the July-September quarter to reflect the markup of materials, the company said.
ASE shares yesterday gained 1.2 percent to NT$25.40, while Siliconware rose 1.65 percent to NT$33.95.
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